There is no quarrel on the point that the assessee, being an insurance company is not required to prepare its accounts as per Parts II & III of Schedule VI of the Companies Act, 1956. Sub-section (2) of section 211 are required every profit and loss accounts of the Companies shall be prepared as per the requirement of Part II of Schedule VI.
In all foreign countries operation was carried out through assessee’s branches which was a permanent establishment situated outside India. Hence, the income attributable to these branches cannot be taxed in India. This issue has also been decided in favour of the assessee by Tribunal in assessee’s own case for assessment year 1997-98. Therefore, appeal filed by the department was to be dismissed.
It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record.
In the case of ITO v. Harley Street Pharmaceuticals Ltd. [2010] 38 SOT 486 (Ahd) it has been held that provisions of Sec.50C are applicable only for computation of capital gains in real estate transaction in respect of seller only and not for the purchaser.
It is not necessary for the assessee to show that any legitimate expenditure incurred by him was also incurred out of necessity. It is also not necessary for the assessee to show that any expenditure incurred by him for the purpose of business carried on by him has actually resulted in profit or income either in the same year or in any of the subsequent years.
The assessee in this case has used multiple year data in computing the arm’s length price. The TPO, the Assessing Officer as well as the Commissioner of Income Tax (Appeals) have held that, such action by the assessee is contrary to the provisions of the Income Tax Act, 1961 and thus it tantamounts to furnishing of inaccurate particulars of income.
Just because an AIR report was generated indicating the PAN No. of assessee, the onus does not shift completely to assessee. It is the responsibility of AO to examine complete details before asking for reconciliation and whether the transactions were indeed undertaken or not. The AIR report also does not contain any authentication but since it is generated by the Department, credit was given by AO and DRP about its authenticity.
From the ratio laid down by the Hon’ble Delhi High Court, it is clear that the instructions issued in the Circulars by CBDT are applicable for pending cases also. Therefore, by keeping in view the ratio laid down in the aforesaid referred to cases, we are of the considered view that Instruction No.3/11, dated 09.02.2011 issued by the CBDT are applicable for the pending cases also and in the said instructions, monetary tax limit for not filing the appeal before the ITAT is Rs. 3.00 lakhs.
It was held by the Third Member that section 147 applies both to section 143(1) as well as section 143(3) and, therefore, except to the extent that a reassessment notice issued u/s 148 in a case where the original assessment was made u/s 143(1) cannot be challenged on the ground of a mere change of opinion,
The profit margin from the international transaction with the A.E. has to be seen in relation to the uncontrolled transaction with the independent parties. What is to be compared is the international transactions of the assessee with its related parties and not for its entire transaction with non-related parties also. Therefore, ALP has to be seen only with regard to international transaction with A.Es and not on the entire turnover/sales.
